The Inflation Reduction Act (IRA) of 2022 AND WASTEWATER

The IRA is the largest investment in combating climate change in U.S. history, and it supports wastewater energy. *

* Details vary by location, seek professional advice

What changed with IRA?

The IRA has expanded the eligibility to claim the “full” existing energy investment tax credit (ITC) described in Section 48 of the Internal Revenue Code of 1986, as amended (Code), to certain projects that previously only qualified for a reduced ITC or did not qualify at all, including:

What is a "thermal energy storage property" ?

As amended by the IRA, Section 48 of the Code defines “energy storage technology” as: (1) a property that receives, stores, and delivers energy for conversion to electricity or storage and has a minimum nameplate capacity of five kilowatt hours and (2) “thermal energy storage property.”

The term “thermal energy storage property” is defined as a property in a system that

(1) is directly connected to a heating, ventilation, or air conditioning system,

(2) removes heat from or adds heat to a storage medium for subsequent use, and

(3) provides energy for the heating or cooling of the interior of a residential or commercial building.

“Thermal energy storage property” does not include “(I) a swimming pool, (II) combined heat and power system property, or (III) a building or its structural components.” Additionally, the credit for energy storage technology under this section only applies to projects on which construction begins before December 31, 2024. However, at that point, a credit under I.R.C. § 48E for energy storage technology becomes available.

A Waste Energy Recovery Property Is Eligible For The 30% Rebate

Both SHARC and PIRANHA wastewater energy systems meet this definition.

Extension of Energy Investment Tax Credit (Section 48)

The IRA Extends the existing energy investment tax credit for applicable energy projects. This tech-specific ITC ends in 2024 for most technologies and is replaced by the new tech-neutral Clean Electricity ITC (48E), which begins in 2025 (as per above).

Extends date of construction in most cases to 2024 and maintains a 10% or 30% credit.
- Maintains 30% credit for solar energy property, geothermal property, fiber-optic solar property, fuel cell property, microturbine property, small wind property, offshore wind property, combined heat and power property, and waste energy recovery property constructed before January 1, 2025.
- Creates 30% credit for energy storage technology3,4 biogas property, microgrid controllers, dynamic glass, and linear generators constructed before January 1, 2025.
- Extends 10% credit for microturbine projects constructed before January 1, 2025.
- 30% credit for geothermal heat pump projects constructed before January 1, 2033. Credit reduces to 26% in 2033 and 22% in 2034.
Applies a 10% bonus for meeting domestic manufacturing requirements for steel, iron, or manufactured components.
Applies a 10% bonus for projects located in energy communities (defined as brownfield sites or fossil fuel communities).
Includes Direct Pay and Transferability.

IRA News, Information, Whitepapers

Inflation Reduction Act Creates New Tax Credit Opportunities for Energy Storage Projects

Inflation Reduction Act Promotes the Nation’s “Energy Security”

Example wastewater configurations

Wastewater: A dependable & sustainable energy source

Wastewater energy is a predictable, inexhaustible and renewable source of clean energy for both heating & cooling.
It is an enormous untapped energy resource that is scalable and accessible.
Unlike wind and solar, wastewater energy is consistently available, regardless of weather conditions.
Wastewater pairs well with geothermal and can be used as a basis for Energy as a Service

These tax credits will support and incentivize the adoption of SHARC Energy products across the United States.

Jan. 1, 2025

Under the IRA, the full Section 48 Credit, i.e., the 30% energy ITC, will be available to combined heat, power system property, energy storage technology, and waste energy recovery projects that begin construction before Jan. 1, 2025.

Jan. 1, 2035

Meanwhile, ground and groundwater heating and cooling equipment projects that begin construction before Jan. 1, 2035, will also be eligible for the full Section 48 Credit, subject to a phase-out for such projects where construction does not begin until after Dec. 31, 2032.

Local or national clean energy initiatives where SHARC is already in use

Two high-rise apartment buildings in the Bronx

Redevelopment at Brooklyn Developmental Center

Decarbonize Hunts Point Community

Take a video tour of a SHARC 660 installation at leləm̓ village

"We tried everything else, and wastewater was the most impactful."

Watch how Morgan Creek Ventures elevated their sustainable building design with Wastewater Energy

Have a Project in mind?

Our products

SHARC Series

Industrial strength wastewater energy with patented high volume filtration.

PIRANHA Series

All-in-one heat pump for DHW & space conditioning.

SHARC International Systems Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.